Several purported shareholder class action lawsuits have been filed against First BanCorp and certain of its officers and directors with violations of the Securities Exchange Act of 1934 in the U.S. District Courts for the District of Puerto Rico and for the Southern District of New York. First BanCorp operates as the holding company for First Bank Puerto Rico, which provides various financial services in Puerto Rico, the U.S. Virgin Islands, and British Virgin Islands.

The complaint alleges that defendants violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that defendants' statements made during Class Period concerning First Bancorp's earnings and financial condition were materially false and misleading when made because defendants failed to disclose that: (1) the Company's earnings quality had been significantly reduced by First Bancorp's use of overly aggressive accounting methodologies, specifically in its accounting classification of purchases of mortgage loans originated by other financial institutions; (2) the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of First Bancorp; (3) the Company's financial statements were not prepared in accordance with generally accepted accounting principles; (4) the Company's false and misleading accounting treatment of certain mortgage loans purchased would ultimately expose First Bancorp to regulatory scrutiny; and (5) that, as a result of the aforementioned, First Bancorp's reported net income and assets were materially overstated during the Class Period.

The complaint further alleges that on or around August 25, 2005, the Company announced that it was subject to a SEC informal inquiry related to mortgage loans purchased by First Bancorp. On September 30, 2005, the Company's Chief Executive Officer and Chief Financial Officer resigned from First Bancorp. On October 21, 2005, the Company announced that the SEC had issued a formal order of investigation into First Bancorp relating to, among other things, transactions in which the Company acquired substantial number of mortgage loans from other Puerto Rican financial institutions.

If you bought First BanCorp securities between October 20, 2003 and August 25, 2005, inclusive, and would like to obtain information about the First BanCorp lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney.